Infosys Diluted Focus on Meritocracy, Accountability: Narayana Murthy

As he signed off his second innings at Infosys, industry icon N R Narayana Murthy on Saturday said Infosys, India's second largest IT services firm, had "diluted focus on meritocracy and accountability" in the past decade, forcing him to take "hard and tough decisions".

Addressing shareholders for the last time as executive chairman, Mr Murthy, who earlier this week announced that he along with his son Rohan have decided to step down full four years ahead of their term, said his "work was done" and hoped that the new CEO Vishal Sikka would chart a new course without any interference from founders.

"...fairness, transparency, meritocracy and accountability are the key to success for any enterprise. Somehow, the company had diluted its focus on meritocracy and accountability during the last decade," Mr Murthy said at the 33rd annual general meeting (AGM) in Bangalore.

Describing Mr Sikka as a technology visionary, Mr Murthy said he had carried out the mandate that the Infosys board had accorded him about a year ago.

Mr Sikka, whose appointment was announced on June 12, was not present at the AGM as he was on his way to the US.

Thirty three years since its inception, the Indian IT behemoth appointed Mr Sikka as its first non-founder CEO.

Analysts believe this could be the "fresh start" that Infosys needed as it has lagged behind peers like Tat Constancy Services (TCS) and HCL Technologies.

Mr Murthy, who founded Infosys along with six engineers in 1981, bid adieu to the over $8 billion entity for the second time. (Read more)

He was called back from retirement last June. Defending his decision to bring in his son, Rohan, Mr Murthy said he wanted to bring in a "fresh perspective to the field" and focus on the use of "technology and high quality people".

Mr Murthy will continue as non-executive chairman till October 10, after which he will be designated as chairman emeritus.

Emphasising that Infosys will continue to be a technology company, Mr Murthy highlighted various efforts that the company is making for automation and improving the quality of its employees.

"We have started initiatives to introduce automation. We will soon start fast-track career programme for high performers, technology stream programme for architects, designers," he added.

The company has hired many engineers at entry-level in sales and is also working on improving training programmes and assessment process for employees to improve software delivery.

On the senior-level exits, Mr Murthy said, "Some of those who left were low performers, some were seniors who had higher aspirations. Those who had to be retained were retained."

In the past one year, Infosys has seen exits of former CFO V Balakrishnan, Americas head Ashok Vemuri and President BG Srinivas. Other key exits include global sales head Basab Pradhan, Infosys consulting head Stephen Pratt, BPO sales head Australia Kartik Jayaraman and BPO head Latin America Humberto Andrade.

Explaining the rationale behind his move, Mr Murthy said he had set upon identifying performers and non-performers upon his return.

"I set upon identifying performers and giving them opportunities to lead the resurrection of the company and identifying not so well performing people and moving them to tasks they were best suited for."

Mr Murthy also said that every decision was approved by the senior management.

However, former Infosys official Mohandas Pai attributed the exits to lack of empowered senior managers.

"Lack of empowerment of senior managers is the reason the company failed in the last three years. The people who left, they are doing extraordinarily well, wherever they are," said Mr Pai, who held the finance and HR responsibilities at Infosys.